A Project Will Give a One-Time Cash Flow of $22,000

question 51

Multiple Choice

A project will give a one-time cash flow of $22,000 after one year. If the project risk requires a return of 11%, what is the levered value of the firm with perfect capital markets?

• A) $15,855.86
• B) $19,819.82
• C) $23,783.78
• D) more information needed

Understand the direct and indirect methods for calculating cash flows from operating activities.

Analyze changes in balance sheet accounts to determine their impact on cash flows.

Distinguish between cash flows from operating activities and other adjustments.

Recognize the effect of accounts receivable, inventory, and accounts payable changes on cash flow.

---

Definitions:

General Economic Conditions

The overall state of the economy, including factors like inflation rates, unemployment levels, and GDP growth that affect business operations and decisions.

Common-sized Balance Sheet

A financial statement that presents all items in percentage terms of the total assets for comparison purposes.

Total Liabilities

The sum of all current and long-term obligations that a company owes to others.

Total Current Assets

The sum of all assets expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.